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The case some executives made for sticking with Trump

President Donald Trump (L) greets former General Electric CEO Jack Welch at the beginning of a policy forum in the State Dining Room at the White House February 3, 2017 in Washington, DC.
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President Donald Trump (L) greets former General Electric CEO Jack Welch at the beginning of a policy forum in the State Dining Room at the White House February 3, 2017 in Washington, DC.

As corporate chieftains on a White House advisory panel debated on Wednesday on whether to disband, a few spoke up in favor of sticking with President Trump.

They made their case in terms of business self-interest, patriotism and pragmatism.

Jack Welch, the retired leader of General Electric, said the business leaders should not abandon the president, according to a person briefed on the call, who was not authorized to speak about it.

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W. James McNerney Jr., the former head of Boeing, reminded the corporate executives that they wanted a business-friendly administration. Mr. McNerney, the person said, told the group that he was in favor of condemning Mr. Trump's remarks but that the pro-business agenda was too important to justify dissolving the council and losing influence.

But they were lonely voices.

The group ultimately decided to disband to protest Mr. Trump's equating far-right hate groups with the groups opposing them in Charlottesville, Va.

The apparent retreat from Mr. Trump by many corporate executives has added to concerns that chaos in the White House and the president's propensity to inflame crises as opposed to tamping them down are jeopardizing his agenda to overhaul taxes and put in place an infrastructure plan.

Stocks slid on Thursday in part on worries that the president's ruptured relations with business would damage his plans to jump-start economic growth. The decline steepened after the terrorist attack in Barcelona.

The Standard & Poor's 500 stock index closed the day down 1.54 percent, and the Dow Jones industrial average ended down 1.24 percent. The closely watched VIX, the Chicago Board Options Exchange Volatility Index, better known as Wall Street's fear gauge, soared more than 30 percent.

On Thursday, the White House announced that a presidential advisory group on infrastructure policy and investment was also disbanding.

A number of companies, including Merck, Under Armour, Intel, Pepsi, G.E., IBM and Johnson & Johnson, made public statements this week condemning Mr. Trump's remarks that "many sides" were responsible for the violence in Virginia as being at odds with their corporate values.

Some of his supporters in the business world and several corporate members of the advisory groups, meanwhile, have not said anything publicly about Charlottesville.

One of the more vocal supporters of Mr. Trump's economic agenda, Stephen A. Schwarzman, the chief executive of the private equity giant the Blackstone Group, has condemned the events in Charlottesville.

"Principled stances are not common. They wait for public opinion to tell them what to do." -Rosabeth Moss Kanter, Harvard Business School

As the one who conceived of and, at the president's request, led the most prominent of the shuttered White House councils, he has felt the recent tensions between corporate America and the president most keenly. Mr. Schwarzman, of all the council members, maintained the most consistent contact with the president.

According to people who have spoken with him, Mr. Schwarzman was disappointed that the panel was not able to fulfill its ultimate function, which was to help the president deliver on his pro-growth promises by offering tips and advice from the front lines of business and finance.

Now that the panel has disbanded, it remains unclear if Mr. Schwarzman will continue to discuss policy with the president.

Mr. Schwarzman declined to comment.

The unfolding corporate response to Mr. Trump — and the varied reactions by companies — reflects the constellation of outside pressures top corporate executives face today, management experts say.

"Principled stances are not common," said Rosabeth Moss Kanter, a professor at Harvard Business School. "They wait for public opinion to tell them what to do."

"C.E.O. courage is in short supply," she said.

That is more the case these days than back in the 1960s and 1970s, when business leaders like Irving S. Shapiro of DuPont, Reginald H. Jones of G.E. and Thomas Watson Jr. of IBM often led public opinion, said Jeffrey Sonnenfeld, a professor at the Yale School of Management.

Some business leaders, Mr. Sonnenfeld said, were advocates for the creation of federal environmental protection programs, and Mr. Jones of G.E. popularized the phrase "corporate social responsibility."

But their contemporary counterparts, he said, are under much greater pressure to deliver quarterly profits, travel constantly and work almost round the clock.

"They don't have the time or the support in their boardrooms to be corporate statespeople," Mr. Sonnenfeld said.

The modern C.E.O., said Michael Useem, a management professor at the University of Pennsylvania's Wharton School, holds a job that calls for "great pragmatism" under scrutiny from shareholders, consumers, employees and advocacy groups, all of which is amplified by the instantaneous communication of social media.

In dealing with Mr. Trump, corporate executives had to weigh speaking out against the risk of being the target of a presidential tweetstorm or the potential loss of lucrative government contracts.

Mr. Trump may be mercurial and unpredictable, but access to the White House can put a favored executive or investor in a position to influence policy.

But their contemporary counterparts, he said, are under much greater pressure to deliver quarterly profits, travel constantly and work almost round the clock.

"They don't have the time or the support in their boardrooms to be corporate statespeople," Mr. Sonnenfeld said.

The modern C.E.O., said Michael Useem, a management professor at the University of Pennsylvania's Wharton School, holds a job that calls for "great pragmatism" under scrutiny from shareholders, consumers, employees and advocacy groups, all of which is amplified by the instantaneous communication of social media.

In dealing with Mr. Trump, corporate executives had to weigh speaking out against the risk of being the target of a presidential tweetstorm or the potential loss of lucrative government contracts.

Mr. Trump may be mercurial and unpredictable, but access to the White House can put a favored executive or investor in a position to influence policy.